Columbia Banking System : Reverse Merger Accounting Overview

Reverse Merger Accounting Overview

03.03.2023

COLUMBIA BANKING SYSTEM

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Notes

The following slides are intended to provide a high-level overview of reverse merger accounting. Columbia Banking System, Inc. ("Columbia") was the legal acquirer in the merger with Umpqua Holdings Corporation ("UHC") that closed on February 28, 2023, and Columbia was the surviving holding company. UHC was the accounting acquirer in the merger, and as such, following the close of the merger, historical Columbia data reflect historical UHC data, with share counts adjusted by the merger's exchange ratio of 0.5958, as detailed on slide 4. The following slides should be viewed alongside the notes detailed below and Columbia's 8-K/A filed on March 3, 2023, which reviews unaudited pro forma condensed combined financial information and its accompanying notes.

1. Combined company reflects the operations of each historical bank (Umpqua Bank and Columbia State Bank) and the operations of the holding company, Columbia Banking System, Inc. beginning on March 1, 2023. As UHC was treated as the accounting acquirer in the transaction, under the acquisition method of accounting, the assets and liabilities of Columbia, as of February 28, 2023, were recorded by UHC at their respective fair values.
2. Historical UHC reflects the operations of Umpqua Holdings Corporation prior to its merger with Columbia Banking System, Inc. after the close of business on February 28, 2023.
3. Share counts should be viewed for illustrative purposes only as actual prospective share counts will vary from the data presented. Historical share counts are used for illustrative purposes, and do not include the impacts of certain share issuances and vesting that would be additive to the displayed share count. Historical UHC EOP shares are represented by EOP shares at December 31, 2022 for all periods presented. Historical UHC average shares are represented by 2022 average diluted shares for all periods presented. Historical (pre-merger) COLB EOP shares are represented by EOP shares at December 31, 2022 for all periods presented. Historical (pre-merger) COLB average shares are represented by 2022 average diluted shares for all periods presented.

COLUMBIA BANKING SYSTEM

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Reverse Merger Accounting Mechanics:

Financial Statements(1),(2)

	Year Ended	Month Ended	Month Ended	Month Ended	Three Months Ended
	December 31, 2022	January 31, 2023	February 28, 2023	March 31, 2023	March 31, 2023	Notes
Income Statement
Net Interest Income	Historical UHC	Historical UHC	Historical UHC	Combined Company	Jan + Feb + Mar	March will include discount accretion related to the fair value marks made on
Columbia's balance sheet on February 28, 2023.
Provision - operating	Historical UHC	Historical UHC	Historical UHC	Combined Company	Jan + Feb + Mar	Includes two months of historical UHC-related provision and one month of the
combined company's provision.
			Initial provision on			Initial provision will include the required ACL for Columbia's non-PCD loans as of
Provision - merger-related	NA	NA	Columbia non-PCD loans	NA	Jan + Feb + Mar	February 28, 2023; required ACL associated with Columbia PCD loans will be reflected
taken at close of merger	through the balance sheet at closing with no significant impact to the income
			on February 28, 2023			statement.
Non-interest income	Historical UHC	Historical UHC	Historical UHC	Combined Company	Jan + Feb + Mar	Includes two months of historical UHC-relatednon-interest income and one month of
the combined company's non-interest income.
Non-interest expense	Historical UHC	Historical UHC	Historical UHC	Combined Company	Jan + Feb + Mar	March will include amortization of the core deposit intangible asset associated with
Columbia's deposit portfolio on February 28, 2023.
Net income	Historical UHC	Historical UHC	Historical UHC	Combined Company	Jan + Feb + Mar	Net income reflects the tax-effected items highlighted above.
Balance Sheet
	Historical UHC at				Combined company at	The combined company balance sheet is the sum of the historical UHC balance sheet
End of period balance sheet				and the Columbia balance sheet as of February 28, 2023 adjusted for fair value marks
December 31, 2022				March 31, 2023
				at that time plus changes to the combined company subsequent to the closing.
	Historical UHC at				Combined company at
End of period share count	December 31, 2022 x				See example on slide 4.
			March 31, 2023
	exchange ratio
Average balance sheet	Historical UHC	Historical UHC	Historical UHC	Combined Company	Average of Jan, Feb, and	Calculated as the average of January, February, and March.
Mar
	Historical UHC 2022	Historical UHC x	Historical UHC x		Average of Jan, Feb, and
Average shares (basic and diluted)	average shares x	Combined Company	See example on slide 4.
exchange ratio	exchange ratio	Mar
	exchange ratio

The above chart should be reviewed alongside the notes detailed on slide 2 and Columbia's 8-K/A filed on March 3, 2023, which reviews unaudited pro forma condensed combined financial information and its accompanying notes.

COLUMBIA BANKING SYSTEM

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Reverse Merger Accounting Mechanics:

Share Count Calculation Examples(1),(2),(3)

Year Ended	Month Ended	Month Ended	Month Ended	Three Month Ended
December 31, 2022	January 31, 2023	February 28, 2023	March 31, 2023	March 31, 2023	Notes

End of Period Shares Calculations

	Pre-Closing Share Calculation
	Historical UHC shares	217 million							All historical shares (pre-closing shares) will be reported as historical UHC shares
	Multiplied by the exchange ratio	x 0.5958
							multiplied by the exchange ratio. This will impact all reported per-share metrics (e.g.,
	Historical UHC shares converted to COLB shares	129 million	not disclosed	not disclosed	NA - merger closed	NA - merger closed	book value per share, dividends per share).
	Post-Closing Share Calculation
	Historical UHC shares						217 million
	Multiplied by the exchange ratio						x 0.5958
	Equals COLB shares issued for UMPQ shares						129 million
	Plus historical (pre-merger) COLB shares						+ 79 million
	COLB shares at March 31, 2023						208 million	Reported as EOP share count on March 31, 2023.

Average Diluted Shares Calculations

Pre-Closing Share Calculation
Historical UHC shares	217 million	217 million	217 million							All historical shares (pre-closing shares) will be reported as historical UHC shares
Multiplied by the exchange ratio	x 0.5958	x 0.5958	x 0.5958
						multiplied by the exchange ratio. This will impact all reported per-share metrics (e.g.,
Historical UHC shares converted to COLB shares	129 million	129 million	129 million	NA - merger closed	NA - merger closed	earnings per share).
Post-Closing Share Calculation
Historical UHC shares					217 million		217 million
Multiplied by the exchange ratio					x 0.5958		x 0.5958
Equals COLB shares issued for UMPQ shares					129 million		129 million
Plus historical (pre-merger) COLB shares					+ 79 million		+ 79 million
COLB shares for the month ended March 31, 2023					208 million		208 million
Q1 2023 average diluted share calculation		129 million	129 million		208 million		155 million	Calculated as the average of January, February, and March. Note that average diluted
			shares for the year ended December 31, 2023 will be impacted by the lower share

count in January and February (pre-closing) relative to the remainder of the year.

The above chart should be reviewed alongside the notes detailed on slide 2 and Columbia's 8-K/A filed on March 3, 2023, which reviews unaudited pro forma condensed combined financial information and its accompanying notes.

COLUMBIA BANKING SYSTEM

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